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New Zealand just the beginning for Temple & Webster

Temple & Webster is testing the waters of international expansion with an upcoming launch in New Zealand this financial year.

The launch will occur in several stages, according to Temple & Webster CEO Mark Coulter.

“The first phase is likely to be through [New Zealand online marketplace] TradeMe to ensure we understand the market and operational requirements,” he told IR.

“If that’s successful and we see demand for the offering, we’ll be looking to set up a dedicated digital presence. Our website, mobile site and potentially our mobile app.”

Coulter said most orders will be shipped straight from the supplier using a dropship model, but the retailer will ship private-label products – which make up roughly 15 to 20 per cent of its inventory –from its third-party warehouse in Melbourne.

Coulter said this approach could evolve over time to include a third-party logistics provider in New Zealand.

“That’s a little TBD [to be determined],” he said.

He added that overseas expansion has been a goal since the business launched in 2011.

“We’ve always had plans to take Temple & Webster outside Australia. In terms of timing, the last two years were about making sure the core business was in place to get back on the growth plan,” he said.

“As the turnaround is complete and we’ve emerged stronger than ever, we’ve been looking at the second and third horizons in terms of growth. We’ve been scoping [the New Zealand launch] most of this year.”

While the Australian online furniture market is far from saturated – only 4 per cent of sales are online, according to IBISWorld – New Zealand is just the first international market on Temple & Webster’s radar.

If the expansion is successful, Coulter said the team will look to launch in other markets, with South East Asia a probable area of focus.

Home improvement

At the same time, Temple & Webster is looking to capture a greater portion of the dollars that consumers spend on their homes by offering more home improvement and DIY products.

The retailer took its first step in this direction with the introduction of a paint range in May 2017, but Coulter said the company will begin going after the market more aggressively this year.

“If you include the whole of DIY, it’s a much bigger market than homewares,” he said, explaining the rationale for the move.

Annual revenue from hardware and building supplies businesses is $21.6 billion in Australia, according to recent research from IBISWorld.

“Obviously, we won’t be selling timber like Bunnings, but things that are a natural extension [of our range]…like curtains and potentially larger appliances,” Coulter said.

The home improvement category has even lower online penetration in Australia than furniture, with Bunnings only recently launching a limited e-commerce site and Mitre 10 only offering buy online, pick-up in-store.

“I think Bunnings not being online is an opportunity for us, but I think we’ll play in a different space,” he said.

“Like Amazon, Bunnings is definitely about convenience and price, whereas we’re about inspiration and making a home beautiful.”

Physical formats

In line with this, Temple & Webster on Tuesday revealed it is launching a new design studio to provide in-person styling services and advice to customers out of its head office in St Peters, Sydney.

The design studio is B2C version of a service Temple & Webster has offered its business clients for some time and builds on the company’s ‘style school’ videos, through which it offered less personalised advice in the past.

“It’s a place to come and experience Temple & Webster in the real world, see samples of products, meet consultant and have a more human experience. The whole point is to make [the customer’s] shopping journey easier,” Coulter said.

It’s also an opportunity for the retailer to test a new bricks-and-mortar format, having already trialled a clearance outlet and now a showroom in its Richmond store. Coulter said the company will continue to experiment with different physical formats, thought its “main game” is online retail.

“That’s where we’re putting most of our effort, but we’re experimenting with the offline channel,” he said.

“We may even try something else and see what works. Maybe we can combine them into a single concept and potentially roll out more.”

Temple & Webster has more definite plans when it comes to mobile shopping. A long-talked-about mobile app is due to launch before Christmas. While the overall aim is to provide a better experience for mobile shoppers, it’s not all about speed and simplicity in the checkout.

“Interestingly, we are thinking about it slightly differently. We want to make sure our mobile site is a fast transactional site, and our mobile app is the place where you go to experience the world of Temple & Webster,” Coulter said.

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